Shares in the UK’s second biggest supermarket gained nearly 5 per cent in early trading today amid fiercely-denied reports that Sainsbury’s has kicked off the search for a new chief executive.
Reports emerged on Sunday that the grocer has earmarked potential internal candidates to replace under-pressure boss Mike Coupe. And on Monday morning, Sainsbury’s firmly refuted the claims.
Sainsbury’s said: ‘Every responsible business has potential succession plans for its CEO. This is nothing new.
Should I stay or should I go now? Sainsbury’s has denied reports that it is seeking a replacement for under-pressure boss Mike Coupe
‘We are not talking to internal candidates about succession planning for Mike and have been clear he has the full support of shareholders and the board.’
Whether in response to talk of Coupe’s departure, or the supermarket’s subsequent denial of it, shares rose 4.7 per cent to 190p on Monday morning.
The orange supermarket’s shares have tumbled a long way from its 52-week high of 342p following a torrid year during which Coupe’s master-plan to merge with rival Asda was kiboshed.
Coupe, who has been at the helm since 2014, has come up against heavy criticism since the deal was blocked by the competition watchdog, with questions also raised over his £3.9million pay package.
Despite the failed merger costing the company £46million in fees, Coupe was overwhelmingly re-elected at the company’s annual general meeting last month.
In the report denied by Sainsbury’s, the Sunday Telegraph claimed that three existing members of staff were being considered for the top job.
They include John Rogers, who currency runs Argos, Simon Roberts, director of retail and operations, and Paul Mills-Hicks, commercial director of food.
Shore Capital analyst Clive Black said he ‘struggled to see merit’ in replacing Coupe as chief executive.
He added: ‘After that corporate failure, noting under-performance of Sainsbury’s in particular through the engagement process, Sainsbury’s is back focused upon the day job, necessarily, and we sense that progress is being made in stabilising deteriorating store standards whilst work continues on its price file.’